focus note
No. 70
April 2011
Cross-border Funding
of Microfinance
A
s of December 2009, cross-border funders
[UN] agencies, and development finance institutions
reported commitments to microfinance1 of
[DFIs]) and private (foundations and institutional and
US$21.3 billion, reflecting a 17 percent increase (US$3
individual investors)—contribute to microfinance in
billion) over 2008 commitments.2 Although this rate
different ways. Most public funders use microfinance as
of increase is lower than the prior year’s 30 percent
a tool to achieve development goals, such as poverty
growth rate, cross-border funding is expected to
reduction, economic and social development, and
continue growing. Of cross-border funders, public
financial inclusion. In contrast, for private investors,
funders provide a larger share of commitments,
microfinance presents an opportunity to diversify
though private funders are growing their commitments
their investment portfolios, while also doing good.
at a higher rate, with 2009 commitments one-third
Public funders are largely funded by government
higher than 2008 commitments. In some markets,
budgets, though some also raise money in capital
cross-border funding represents the lion’s share of
markets. Private funders, in contrast, include individual
microfinance institutions’ (MFIs’) funding base. Yet,
investors, institutional investors, and foundations.
where institutions can mobilize deposits and where
With private interests driving their activities, private
local capital markets exist, cross-border flows are likely
funders do not have political pressure, nor are they
to represent a small part of the picture (see Box 1).
publicly accountable for the uses of their funds.
This Focus Note draws on data from CGAP’s annual
Although the number of private funders has expanded
surveys on cross-border funding (2009, 2010) to
over the past 20 years, the bulk of cross-border funding
provide an overview of the microfinance funding
today still comes from public donors and investors
landscape and trends in cross-border funding.
(see Figure 1). Public funders’ commitments totaled
3
Who is funding
microfinance and how?
The US$21.3 billion in commitments to microfinance
includes funding from more than 61 funders and 90
microfinance investment intermediaries (MIIs) that
reported to the CGAP survey. Funders’ commitments
represent all active investments and projects supporting
microfinance. As the typical project length is around
three to five years, commitments include funds
already disbursed as well as funds not yet disbursed.
While commitments do not tell us how much funding
reaches the microfinance sector within a given year,
it is currently the most reliable indicator available for
analyzing overall trends in microfinance funding.4
Mayada El-Zoghbi,
Barbara Gähwiler,
and Kate Lauer
A broad range of cross-border funders—public
US$14.6 billion as of December 2009, representing
almost 70 percent of total cross-border funding to
microfinance.
Box 1. What about local funding?
• In countries where MFIs can offer savings
services, client deposits can be a major
funding source. Other local funding sources
include loans from local commercial banks
and private investors, funds raised in the local
capital markets, and government loans and
grants.
• Gathering accurate and complete global
data on local funding sources is challenging.
At the country level, data are available on
the funding structures of MFIs through MIX
(www.mixmarket.org). For example, the
funding structure of Bolivian MFIs in 2009
was made up of 65 percent deposits, while
debt represented only 13 percent.
(multilateral and bilateral donors, United Nations
1 For purposes of the CGAP Microfinance Funder Survey and this Focus Note, microfinance is defined as financial services for poor and low-income populations.
2 Data in this Focus Note are based on the 2010 CGAP Microfinance Funder Survey and the 2010 CGAP MIV Survey. These two surveys,
which together contain information on 151 institutions and funds representing 85–95 percent of cross-border funding for microfinance,
constitute the most comprehensive available dataset on cross-border funding of microfinance. A summary appears in Annex II; further
information is available at www.cgap.org/funders.
3 Approximately 70 percent of funders reporting to the CGAP Microfinance Funder Survey expect commitments to stay the same or increase in 2010.
4 Not all funders capture reliable data on annual disbursements. See Annex I for more information on commitments.
2
Figure 1: Cross-border funding landscape
Total Commitments to Microfinance as of December 2009: $21.3 billiona
Private Donors and
Investors
Public Donors and
Investors
(Foundations, Institutional and
Individual Investors)
(Multilaterals, Bilaterals, DFIs)
$14.6 billion
$11
blnb
$2.4 bln
$1.2 bln
Microfinance
Investment
Intermediaries
(MIIs)
$8.1
bln
Apexes and
other
Intermediaries
$6.7 billion
$5.7 bln
$0.9
blnb
$0.1 bln
No
data
Microfinance
(Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy)
a
b
Amounts based on data submitted by 61 funders and 90 MIIs.
Includes funding through governments.
As of December 2009, private funders had US$6.7
from foundations and international nongovermental
billion committed to microfinance, representing around
organizations (NGOs) totaled approximately US$1.1
30 percent of total commitments to microfinance.
billion. CGAP has identified over 400 foundations
Institutional investors, such as commercial banks,
with some activities in microfinance, but only a
pension funds, insurance companies, private equity
few reach significant scale. Having increased their
firms, and other corporate investors, have become
commitments to microfinance significantly over the
a major source of funding. Demand from individual
past three years, the Bill & Melinda Gates Foundation
investors—both high-net-worth individuals and
is now among the 10 largest cross-border funders.
retail investors—to invest in microfinance has also
significantly increased over the past few years following
a general trend toward socially responsible investment
Intermediaries play a significant role in
channeling funding to microfinance
(SRI). Sustainable and responsible investments, which
combine investors’ financial objectives with their
Almost half of total cross-border funding is channeled
concerns about environmental, social, and governance
through MIIs and local wholesale facilities (also called
issues, are gaining popularity in the United States and
apexes). The other half is provided directly to retail
in Europe. Between 2007 and 2009, the European SRI
providers, such as MFIs and banks; meso-level actors,
market increased by an annual compound growth rate
such as training centers, rating agencies, and credit
of 37 percent, and total assets under management
bureaus; and government programs and agencies in
reached EUR 5 trillion by the end of 2009. Eurosif,
the policy space.
a pan-European network promoting sustainable and
responsible investment, forecasts that microfinance
Growing interest from individual and institutional
will be of significant interest to European investors in
investors to invest in microfinance has led to the
the coming years, with growth coming mostly from
emergence of over 100 intermediaries, including
institutional investors (Eurosif 2010).
microfinance investment vehicles (MIVs), holding
companies (such as ProCredit), and peer-to-peer
Microfinance also receives funding from private
lending platforms (such as Kiva and Babyloan).
donors, mostly in the form of grants. Commitments
These intermediaries combined managed over US$8.1
3
Figure 2: The purpose of funding (% of total commitments as of December 2009)
Figure 2: The purpose of funding (% of total commitments as of December 2009)
On-lending
Retail Capacity Building
Capacity Building
12%
On-lending
88%
8%
2%
2%
Capacity Building at the Market Infrastructure Level
Capacity Building at the Policy Level
billion as of December 2009 (CGAP 2010e). Some MIVs
loan portfolios of MFIs (see Figure 2). Only 8 percent
are open to retail investors, including Dexia Microcredit
of funds were used to build the capacity of retail MFIs.
Fund, responsAbility, Microfinanzfonds, and Triodos
A small amount of commitments, 4 percent of the
SICAV. Other funds are open only for private placements
total amount, was used to strengthen the market
by qualified investors; they typically receive a majority of
infrastructure and legal and regulatory environment.
funding from development banks and other DFIs. Some
MIVs are set up as cooperatives or NGOs, for example,
Debt dominates the picture
Incofin, Oikocredit, and Consorzio Etimos.
Cross-border funding for microfinance usually takes the
Another type of intermediary is the local apex.
form of debt (whether at market rates or concessional
While apexes are funded with public money (often
rates). DFIs and MIIs are the main providers of debt
including government funding), they can take various
funding for financial service providers, which use these
institutional forms, such as development banks,
funds to finance their loan portfolios. UN agencies and
NGOs, or donor or government programs; some are
multilateral organizations, such as the World Bank,
housed within private commercial banks. The top 15
the Asian Development Bank, and International Fund
apexes in the world had an outstanding portfolio of
for Agricultural Development (IFAD), provide loans to
US$3 billion in 2009.
governments. Governments then use the funds to on-
5
lend to MFIs and to support capacity-building initiatives
Majority of money destined to
refinance a range of retail providers
at the retail, market infrastructure, and policy levels.
DFIs, and increasingly MIIs, also invest in the equity of
Cross-border funders support a diverse range of
financial services providers, which strengthens their
institutions that provide financial services for poor
capital structure and can help them access additional
people, including NGOs, greenfield banks, postal
debt funding. DFIs also use guarantees to help
and savings banks, commercial banks, cooperatives,
financial service providers access funding from local
and self-help groups. Many other private firms are
commercial banks.
also recipients of funding for microfinance, including
rating agencies, accounting firms, training centers,
Bilateral agencies, foundations, and NGOs predom­
telecommunications firms, payment platforms, and
inantly use grants to fund financial service providers
others. Cross-border funding also goes to public
so that they can grow and increase the quality and
sector agencies, including government agencies,
scope of services offered. Grants are also used for
ministries, state-owned banks, and wholesale entities.
capacity building at the market infrastructure level
and to strengthen the regulatory environment and
As of December 2009, 88 percent of total commit­
build the capacity of policy makers, central banks,
ments for microfinance were intended to finance the
and supervisory authorities.
5 This is based on research that CGAP conducted in 2010. For prior CGAP research on apexes see CGAP (2010d).
4
Figure 3: Funding instruments by type of funder (based on commitments)
Figure 3: Funding instruments by type of funder (based on commitments)
$21,313 mln
8%
$4,166 mln
0.5%
0.5%
11%
$1,585 mln
$8,852 mln
$1,116 mln
17%
14%
2%
1%
$5,594 mln
6%
21%
30%
2%
12%
78%
60%
86%
50%
88%
11%
60%
20%
22%
All Funders
Mullateral and
UN Agencies
Bilateral Agencies
DFIs
Foundaons
and NGOs
Instuonal and
Individual Investors
Debt
Grant
Equity
Guarantee & other
Figure 3 shows the variety of funding instruments
30 percent in the previous year. However, at US$3.2
used by different types of funders to support
billion, disbursements in 2009 were on average 10
microfinance.6 The US$21.3 billion total committed
percent lower than in 2008.
combines all of these instruments, whether funds
have to be repaid or not (loans versus grants),
DFIs drive growth in commitments
whether they are disbursed or not (e.g., guarantees),
and whether they respond to immediate funding
With commitments of more than US$8.8 billion as of
needs of MFIs (debt funding) or help build the sector
December 2009, DFIs accounted for 42 percent of
in the long term (e.g., grants for capacity building).
total commitments to microfinance.7 While other public
Trends in cross-border funding
funders decreased their commitments in 2009 (bilateral
agencies by 9 percent and multilateral and UN agencies
by 7 percent), DFIs increased their commitments by
Commitments growing; disbursements
lower in 2009
28 percent.8 This growth can also be attributed in part
to DFIs’ anticipation of liquidity shortages due to the
financial crisis. The International Finance Corporation
Despite fears that funding for financial services for
(IFC) and KfW committed US$150 million each to launch
the poor would decline as a result of the 2008–
the Microfinance Enhancement Facility, which also
2009 financial crisis and strained national budgets
attracted funding from other DFIs. This facility provided
in the developed world, cross-border funding to
sustainable MFIs with liquidity when commercial lending
microfinance has continued to increase, albeit at a
was scarce. In general, emergency liquidity facilities
slower rate. As noted, total commitments increased by
were used in Europe and Central Asia (ECA) and Central
17 percent from 2008 to 2009, compared to around
America, the regions most affected by the crisis.
6 The figure shows what funding instruments are used by the primary funder; it does not translate into how funding sources would appear
on the balance sheets of recipients. First, funding for infrastructure (credit bureaus, associations) or for enabling environment would not
be on the books of MFIs. Second, funding often goes through several channels before it lands on the books of MFIs, depending on the
intermediary channels used. A loan to a government, for example, may ultimately result in equity, grants, or debt on the MFI’s books.
For individual and institutional investors that fund microfinance mostly via intermediaries, equity investments captured in the survey
represent the investments in intermediaries (i.e., MIIs) and not in MFIs.
7 Today, DFIs are the main providers of MFIs’ loan capital, followed by individual and institutional investors. DFIs (as well as private investors)
can fund MFIs either directly or through MIIs.
8 Out of the 18 DFIs that reported portfolio information to CGAP, only three did not show any significant positive growth in 2009.
5
Private funding is growing faster than
public funding
their direct equity investments in financial services
providers by 49 percent in 2009 and in MIIs by
24 percent. The share of equity investments as a
Though from a smaller initial base, private investors
funding instrument has increased in most regions
increased their commitments by 33 percent to US$5.6
except in East Asia and the Pacific. The increase
billion as compared to public donors’ 11 percent
in the value of direct equity investments is due to
increase in commitments (see Figure 4). Eleven new
additional funding (70 percent) and to an increase
MIVs were established in 2009, with a large part of
in the appreciation in value of investors’ equity in
their funding coming from private investors, and
financial services providers (30 percent).
MIVs’ asset under management increased by 25
Commitments continue to grow
in ECA and Latin America and the
Caribbean, the regions receiving
the largest shares of funding
percent from 2008 to 2009. However, the growth
in MIVs’ assets under management is much lower
than in previous years (86 percent in 2007 and 34
percent in 2008), while MIVs’ cash positions reached
a record high of 17 percent of assets due to the lack
Regionally, there is significant variation in growth of
of suitable investment opportunities (CGAP 2010e).
commitments and differences in who is driving this
Private giving has also continued to increase.
growth (see Figure 5). ECA and Latin America and
Foundations and international NGOs increased their
the Caribbean (LAC) receive large shares of funding,
commitments by 32 percent. Yet they still represent
both from public and from private funders. LAC is the
only 5 percent of total cross-border commitments to
only region where private funding is similar in scale to
microfinance.
public funding. Commitments to sub-Saharan Africa
(SSA) increased by 22 percent (or US$441 million)
Equity investments are on the rise
from 2008 to 2009. While public funding accounts for
75 percent of commitments to SSA, private funders
While debt remains the most used instrument to fund
increased their commitments to SSA significantly by
microfinance, funders are increasingly investing in
63 percent (US$230 million), almost equally driven
equity. Both DFIs and MIIs, the main providers of
by foundations/NGOs and private investors. Public
equity funding for financial services providers, have
funders increased their commitments to SSA by
increased their equity investments. DFIs increased
13 percent (US$211 million), driven by DFIs.
Figure 4: Commi
ed amount by type of funder (million USD)
Figure 4: Amount committed by type of funder (million USD)
+11%
Annual Growth Rates for 2008 to 2009
14,602
+28%
8,852
+33%
+33%
6,710
-7%
5,594
4,166
-9%
+32%
1,116
1,585
Total Public Funders
Mullateral
and UN Agencies
Public Funders
Bilateral
Agencies
DFIs
Total Private
Funders
Foundaons/NGO
Private Funders
Individual and
Instuonal
Investors
6
Figure 5: Commitments by region as of December 2009 (in million US$)
Figure 5: Commitments by region as of December 2009 (in million US$)
+22%
Annual Growth Rates for 2008 to 2009
6,188
2,003
+21%
+1%
4,724
2,175
4,064
4,185
641
+22%
3,423
+19%
2,549
1,546
577
Eastern Europe
& Central Asia
(ECA)
La‚n America
& the Caribbean
(LAC)
880
Middle East
& North Africa
(MENA)
Public
+38%
1,461
581
1,910
+4%
787
99
688
969
East Asia &
the Pacific
(EAP)
2,544
634
South Asia
(SA)
Sub-Saharan
Africa (SSA)
Mul‚-Region
Private
High concentration of funding
in a few markets
used for capacity building. Multilateral agencies—such as
Funders reporting to the CGAP funder survey in 2010
funding for capacity building, fund mostly through loans
reported microfinance activities in 123 countries.
to governments or through multidonor capacity-building
However, commitments are concentrated in a few
facilities. Many DFIs provide technical assistance along
countries. Ten countries (India, Russia, Peru, Bulgaria,
with their investments, but nonetheless, capacity building
Bangladesh, Mexico, Morocco, China, Pakistan, and
represents a small part of their funding. Overall, SSA
Afghanistan) represent close to 50 percent of total
receives the largest share of capacity-building funding
cross-border commitments. This has changed only
with one-third of global commitments (see Figure 6).
the World Bank—which provide close to 40 percent of
slightly since 2007, with Mexico replacing Egypt
among the top 10 receiving countries. On the other
The top ten grant funders are the Bill & Melinda Gates
hand, the 100 countries at the bottom of the list
Foundation, the U.K. Department for International
receive less than 33 percent of total commitments.
Development (DFID), the European Commission, the
Countries that saw the largest growth in commitments
Canadian International Development Agency (CIDA),
from 2008 to 2009 are India, Russia, China, Turkey,
Gesellschaft für Internationale Zusammenarbeit
and Ethiopia. Around 20 countries saw a decrease in
(GIZ), Millennium Challenge Corporation (MCC),
commitments from 2008 to 2009. Countries that saw
the U.S. Agency for International Development
the largest decrease in commitments are Pakistan,
(USAID), Mastercard Foundation, the Swiss Agency
Sri Lanka, Afghanistan, Nepal, and Egypt.
for Development and Cooperation (SDC), and the
Foundations and bilateral agencies
lead in funding for capacity building
Figure 6: Commitments for capacity
building by region (% of total
Figure
6: Commitments for capacity building
commitments)
by region (% of total commitments)
Commitments for capacity building totaled around
Mul- EAP
Region 11%
15%
US$2.3 billion as of December 2009, 70 percent of
which were for the retail level. This reflects a 4 percent
LAC
19%
increase since 2008. The most common instrument to
fund capacity building is grant funding (70 percent of
all capacity-building funding). Foundations and bilateral
agencies provide over 55 percent of total commitments
ECA
3%
SSA
33%
SA
13%
MENA
6%
7
Australian Agency for International Development
———. 2010b. “Growth and Vulnerabilities in
(AusAID).
Microfinance.” Focus Note 61. Washington, D.C.: CGAP.
Moving Ahead
http://www.cgap.org/p/site/c/template.rc/1.9.42393/
———. 2010c. “CGAP 2010 MIV Benchmarks.”
CGAP’s funding surveys show the magnitude of
Washington, D.C.: CGAP. http://www.cgap.org/
cross-border funding to microfinance worldwide.
gm/document-1.9.47372/CGAP_2010_Benchmarks_
Transparency around what is being funded and in
Tables.pdf
what amounts is an important first step to better
understanding the drivers behind the growth of
———. 2010d. “Apexes: An Important Source of Local
microfinance markets. However, it does not tell us
Funding.” Brief. Washington, D.C.: CGAP, March.
enough about the role of cross-border funders in
http://www.cgap.org/p/site/c/template.rc/1.9.43025/
advancing financial inclusion or exactly how funding
can add most value. The resources required for
———. 2010e. “Microfinance Investors Adjust
building market infrastructure vary greatly from what
Strategy in Tougher Market Conditions.” Brief.
is required for on-lending. Is enough being spent
Washington, D.C.: CGAP, October. http://www.cgap
on capacity building or on regulatory reform? There
.org/p/site/c/template.rc/1.9.47946/
can be “too much” and “not enough” funding at the
same time and even in the same market there may
———. 2010f. “Challenging Times: Do MIVs Need a
be an abundance of one type of funding—debt—but
New Investment Strategy?” Web article. Washington,
shortage of another type—equity.
D.C.: CGAP. http://www.cgap.org/p/site/c/template
.rc/1.26.13458/
Cross-border funding has been a key driver of
growth in the microfinance sector, and it continues
Eurosif. 2010. “European SRI Study.” http://www
to be essential in frontier and remote markets where
.eurosif.org/research/eurosif-sri-study
few private funding sources are available. In more
developed financial markets, however, the picture
IFAD. 2010. “Rural Poverty Report 2011.” Rome:
becomes more complicated: Is cross-border funding
IFAD. http://www.ifad.org/rpr2011/
“crowding in” private, local funding? How can crossborder funding be channeled so that it continues to
Microfinance Information Exchange (MIX). 2009.
serve development objectives?
“2009 MFI Benchmark Tables.” Washington, D.C.:
MIX.
Funders are beginning to analyze their added value more
http://www.themix.org/publications/mix-
microfinance-world/2010/10/2009-mfi-benchmarks
deeply, and they are putting in place checks in their due
diligence and project approval processes that require
———. 2010. “Microfinance Funders Profiles—
them to look at how their programs impact local funding
A Short Guide for Young and Small Institutions
markets. This is an important step forward in making
Still Looking for a Match.” Washington, D.C.: MIX.
sure that cross-border funding continues to serve its
http://www.themix.org/publications/microbanking-
intended purpose as the market context evolves.
bulletin/2010/06/microfinance-funders-profiles-shortguide-young-and-small
References
World Savings Banks Institute. 2006. “Access to
finance—what does it mean and how do savings banks
CGAP. 2010a. Financial Access 2010. The State of
foster access?” Brussels: World Savings Banks Institute.
Financial Inclusion Through the Crisis. Washington D.C.:
http://www.wsbi.org/uploadedFiles/Publications_and_
CGAP/The World Bank. http://www.cgap.org/p/site/
Research_(ESBG_only)/Perspectives%2049.pdf
c/template.rc/1.9.47743/
8
Annex I: Methodology
If not specified otherwise, all analyses in this report
are based on committed amounts.9 Commitments
Both the CGAP Microfinance Funder Survey and
represent the total amount of all currently active
the CGAP MIV Survey were conducted in 2009 and
investments and projects, whether the funds have been
2010, to improve transparency on microfinance
disbursed or not. As such, total commitments describe
funding and to allow data analyses over time. The
the stock of funds set aside for microfinance at a given
surveys collect portfolio data directly from major
time (i.e., December 2009 for the data in this report).
funders as well as MIIs. Thanks to high participation
When analyzing funders’ commitments, one has to
rates, CGAP estimates that the surveys capture
take into account that average project lengths and
85–95 percent of total cross-border funding for
disbursement schedules vary significantly across funders.
microfinance.
The average project length is between three and five
years, but some funders reschedule projects annually
In 2010, 61 funders and 90 MIIs shared information
while others have projects that remain active for five
on their microfinance portfolio.
years or more. Also, funders do not always disburse
everything they committed. Project budgets can change
Data from both surveys were consolidated to present
or disbursements are held back if funding conditions are
a comprehensive picture of cross-border funding to
not fulfilled. In our sample, disbursement rates varied
microfinance. Information on MIIs’ funding sources
from 70 percent to 100 percent, with only six funders
combined with data from the Funder Survey were
reporting a disbursement rate below 90 percent. Finally,
used to estimate funding from individual investors
commitments are a reliable indicator to analyze overall
and institutional investors, making it possible to
trends in microfinance funding, but they do not show
compare public and private funding.
how much money reaches the sector in a given year.
Table A-1: CGAP Microfinance Funder Survey participants in 2010
Public funders
Multilateral and UN
agencies
N58
African Development Bank (AfDB), Asian Development
Bank (AsDB), European Commission (EC), International Fund
for Agricultural Development (IFAD), International Labour
Organization (ILO), Islamic Development Bank (IsDB), United
Nations Capital Development Fund (UNCDF), World Bank
Bilateral agencies
N 5 15
Australian Agency for International Development (AusAID),
Canadian International Development Agency (CIDA), Danish
International Development Agency (DANIDA), UK Department
for International Development (DFID), Finland Ministry of Foreign
Affairs, Gesellschaft für Internationale Zusammenarbeit (GIZ),
Italy Ministry of Foreign Affairs, Japan International Cooperation
Agency (JICA), Luxembourg Agency for Development Cooperation
(LuxDev), Millennium Challenge Corporation (MCC), Netherlands
Ministry of Foreign Affairs, Norwegioan Agency for Development
Cooperation (NORAD), Swiss Agency for Development and
Cooperation (SDC), Swedish International Development
Cooperation Agency (Sida), United States Agency for International
Development (USAID)
(continued)
9 Commitments are used to estimate both current and future funding of microfinance (as opposed to including figures for actual investment
amounts) due to the relative availability of the data as compared to data on funded amounts. However, it is important to keep in mind the
drawbacks of using commitment figures, including the mix of funded and not yet funded amounts; the mix of debt, grants, and equity; and
the absence of a minimum or maximum time period for looking backward or forward.
9
Table A-1: CGAP Microfinance Funder Survey participants in 2010 (concluded)
Public funders
Development
finance institutions
(DFIs)
N 5 18
Agencia Española de Cooperación Internacional para el
Desarrollo (AECID), Agence Française de Développement
(AFD Proparco), Belgian Investment Company for Developing
Countries (BIO), Corporación Andina de Fomento (CAF), CDC,
US Development Credit Authority (DCA USAID), European
Bank for Reconstruction and Development (EBRD), European
Investment Bank (EIB), Finnfund, FMO, Taiwan International
Cooperation and Development Fund (ICDF), International Finance
Corporation (IFC), Inter-American Investment Corporation (IIC),
KFW Entwicklungsbank (KfW), Multilateral Investment Fund (MIF
IADB), Norfund, Overseas Private Investment Corporation, Swiss
Investment Fund for Emerging Markets (SIFEM)
Private funders
Foundations and
NGOs
N 5 16
Foundations: Citi Foundation, Doen Foundation, Ford Foundation,
Bill & Melinda Gates Foundation, Grameen Foundation, Grameen
Jameel, Mastercard Foundation, Michael & Susan Dell Foundation,
Rabobank Foundation, Stromme Foundation, Whole Planet
Foundation
NGOs: Cordaid, HIVOS, ICCO, Omidyar Network, Oxfam Novib
Individual investors
n/a
CGAP estimates*
Institutional
investors
N 5 4 1 CGAP
estimates*
ABP, ING, PGGM, TIAA Cref, and CGAP estimates
*CGAP estimates are based on data from 90 MIIs. For more information on MIIs, see http://www.cgap.org/p/site/c/template.rc/
1.11.142715/
To understand the actual flow of funding to the
All trend analyses and growth rates given in this
microfinance sector, it is necessary to look at annual
report are based on a subset of respondents for
disbursements. Disbursements are the amounts that
which data were available for all years covered by the
funders actually transferred to recipients during a given
CGAP surveys. Data reported in other currencies was
year. Four large funders in our sample did not report
converted to U.S. dollars at the exchange rate as of
disbursements in 2010; it is thus likely that disbursement
31 December 2010. While exchange rate fluctuations
figures are underestimated. As not all funders have
have impacted portfolio data of some individual
reliable data on disbursements, trend analyses and
funders, they do not have a significant impact on
breakdowns based on disbursements are limited.
overall numbers.
KfW
World Bank
EBRD
AsDB
IFC
10,606
6,383
2,676
907
741
0
na
na
na
na
8,842
10,681
1,789
17,206
2,317
1,789
18,827
399
297
1,789
1,546
6,188
4,724
787
4,064
2,544
1,461
2,956
-10%
34%
12%
7%
6%
6%
5%
%
3%
60%
7%
23%
14%
growth
9%
37%
-23%
growth
26%
4%
-23%
growth
23%
11%
9%
-23%
growth
19%
22%
21%
4%
1%
22%
38%
KfW
World Bank
EBRD
AsDB
IFC
9,149
1,862
2,008
842
740
0
7,922
4,891
1,789
11,131
1,682
1,789
12,317
259
237
1,789
969
4,185
2,549
687
3,423
1,909
880
1,442
-32%
1,603
11%
24%
52%
3,176
14,602
17%
na
36%
18%
10%
9%
8%
7%
6%
58%
0%
24%
14%
growth
7.9
6%
47%
-23%
growth
23%
-5%
-23%
growth
19%
-3%
6%
-23%
growth
7%
26%
15%
-1%
-7%
13%
41%
growth
Total Public
21,313
growth
TOTAL CROSS-BORDER
FUNDING TO MICROFINANCE
Methodological Notes: CGAP conducts two regular surveys on funding flows: the CGAP Microfinance Funder Survey and the CGAP MIV Survey. For the first —me this year, data from both surveys was
consolidated to present a comprehensive picture of cross-border funding for microfinance. The table above is based on data reported by 61 funders and 90 microfinance investment intermediaries. All data is
as of December 2009. CGAP used data provided by microfinance investment intermediaries to es—mate funding from individual investors and ins—tu—onal investors. Growth rates are based on a subset of
respondents for which data is available for all years covered by the surveys. If not specified otherwise, analysis is based on commi§ed amounts.
*Commitments represent the stock of funds set aside for microfinance at a given —me, whether or not disbursed. N = 61 funders + CGAP es—mates
**Disbursements are the funds that funders actually transferred to recipients during a given year. N = 57 funders + CGAP es—mates.
***Net new commitments represent the change in commitments in the survey year. N = 57 funders + CGAP es—mates.
**** DFIs' comm—ments at market infrastructure and policy levels are not fully captured by this survey.
For ques—ons or further data requests please contact Barbara Gähwiler at bgahwiler@cgap.org.
Debt
Equity
Grant
Guarantee
Other
Unspecified
Top 5 funders (and % of peer group commitments)
1
2
3
4
5
Commitments by Instrument - Funders' Perspecve
Average project/investment size
Low income countries
Lower middle income countries
Upper middle income countries
Direct Funding by country income group(WB classifica­on)
Direct (including via governments)
Indirect (ie via funds, holdings)
Unspecified
Direct vs. Indirect Funding
On-lending
Capacity Building
Unspecified
Commitments by Purpose
Retail
Market Infrastructure****
Policy****
Unspecified
Commitments by Level of Financial System
East Asia & the Pacific (EAP)
Eastern Europe & Central Asia (ECA)
La­n America & the Caribbean (LAC)
Middle East & North Africa (MENA)
South Asia (SA)
Sub-Saharan Africa (SSA)
Mul­-Region
Commitments by Region
Net New Commitments***
Growth 08/09 (%)
Concentra—on on top 5 funders
Total Disbursed Amount**
Growth 08/09 (%)
Growth 07/08 (%)
Concentra—on on top 5 funders
Total Commied Amount*
All currency figures are in million US Dollars as of 2009-12-31.
N indicates the sample size. Growth rates are for 2008/2009
Peer group table
CGAP Microfinance Funder Survey
36%
29%
19%
7%
5%
-9%
0%
13%
growth
7.9
-1%
69%
-29%
growth
13%
-7%
-29%
growth
5%
75%
15%
-29%
growth
-3%
10%
3%
-30%
-10%
-1%
-3%
growth
AfDB, AsDB, EC, IFAD, ILO,
IsDB, UNCDF, World Bank
World Bank
AsDB
IFAD
EC
AfDB
3,674
13
474
0
5
21.5%
69.5%
9%
2,483
475
1,208
2,081
876
1,208
2,769
80
108
1,208
355
165
387
137
2,353
729
40
-312
-73%
166
-7%
9%
96%
4,166
Mul—lateral & UN
Agencies
(N=8)
19%
18%
15%
9%
9%
-31%
-10%
-6%
471%
2%
growth
4.2
-4%
-33%
-6%
growth
-12%
-9%
-6%
growth
-8%
-22%
-1%
-6%
growth
2%
8%
-5%
15%
-17%
-4%
-38%
growth
AusAID, CIDA, DANIDA,
DFID, Finland MoFA, GTZ,
Italy MoFA, JICA, Lux Dev,
MCC, Netherlands MoFA,
NORAD, SDC, Sida, USAID
DFID
CIDA
GTZ
MCC
JICA
173
13
1,370
29
0
53%
45%
2%
848
156
581
360
643
581
701
174
129
581
143
72
161
164
490
478
76
-138
-4%
267
-9%
9%
69%
1,585
Bilateral Agencies
(N=15)
Public Funders
29%
14%
12%
10%
6%
23%
59%
22%
21%
13%
growth
12%
51%
growth
28%
23%
growth
28%
growth
18%
28%
20%
9%
18%
51%
65%
growth
AECID, AFD Proparco,
BIO, CAF, CDC, DCA
USAID, EBRD, EIB,
Finnfund, FMO, ICDF, IFC,
IIC, KfW, MIF, Norfund,
OPIC, SIFEM
KfW
EBRD
IFC
AECID
FMO
5,302
1,836
164
814
736
9.2
14%
41%
45%
4,591
4,260
0
8,689
162
0
8,847
4
0
0
470
3,948
2,001
386
580
702
763
1,893
-20%
1,170
28%
42%
71%
8,852
DFIs
(N=18)
na
na
na
na
na
1,457
4,520
667
65
0
0
na
920
5,791
0
6,075
635
0
6,510
140
60
0
577
2,003
2,175
99
641
634
581
1,514
na
1,573
33%
na
na
6,710
na
na
na
na
na
growth
68%
29%
growth
33%
38%
growth
33%
48%
23%
growth
47%
14%
28%
80%
129%
63%
34%
growth
Total Private
42%
8%
7%
7%
6%
33%
30%
34%
0%
growth
68%
-32%
growth
22%
38%
growth
30%
48%
23%
growth
38%
0%
56%
68%
135%
96%
-11%
growth
Founda—ons: Ci—, DOEN, Ford,
Gates, Grameen, Grameen
Jameel, Mastercard, MSDF,
Rabobank, Stromme, Whole
Planet; NGOs: Cordaid, HIVOS,
ICCO, Omidyar Network,
Oxfam Novib
Gates F.
Omidyar N.
Oxfam Novib
Mastercard F.
Cordaid
230
154
667
65
0.3
0.9
36%
52%
12%
880
236
0
480
635
0
916
140
60
0
88
72
161
32
153
291
319
229
3%
266
32%
73%
71%
1,116
Founda—ons and NGOs
(N=16)
33%
growth
33%
growth
33%
growth
49%
14%
27%
83%
127%
43%
750%
growth
ABP, ING, PGGM, TIAA CREF,
and CGAP es—mates based on
data from 90 MIVs
na
na
na
na
na
1,228
4,367
na
na
na
na
5,555
5,594
5,594
0
0
0
489
1,931
2,014
67
488
343
262
1,285
na
1,306
33%
na
na
5,594
Individual and Ins—tu—onal
Investors (N=4 + CGAP
es—mates)
22 to 25 billion USD
21.3 billion USD
Private Funders
Total Market (CGAP Esmate):
Sample:
10
Annex II: Data on cross-border funding
-9%
28%
33%
32%
33%
1,585
8,852
6,710
1,116
5,594
11%
9%
-23%
399
297
1,789
4%
-23%
2,317
1,789
KfW
$100-300 mln
$100-300 mln
Vietnam
Cambodia
$300-500 mln
$300-500 mln
Bulgaria
Bangladesh
Philippines
Indonesia
$50-100 mln
$100-300 mln
$300-500 mln
$300-500 mln
Peru
14
5%
Russia
China
GTZ
6%
6%
10%
11%
41%
43%
47%
> $1 bln
5%
IFC
IFAD
8%
-4%
-18%
growth
17%
26%
growth
-28%
39%
14%
25%
growth
49%
38%
47%
18%
2%
-3%
$300-500 mln
6%
AsDB
AsDB
World Bank
93
857
0
30
223
38
304
595
93
251
1,202
93
41
42
1,369
489
88
577
470
143
355
7%
India
7%
6%
EBRD
12%
World Bank
KfW
123
-23%
1,789
-2%
381
-3%
18%
37%
47%
476
1,832
318
6%
5,836
10,681
9%
8,842
growth
26%
17,206
growth
23%
18,827
growth
-7%
4,166
969
42
90
11%
12
16
14,602
6
8
13
230
2,956
8
37%
18
19%
36%
15
1,546
17%
growth
East Asia & the Pacific
(EAP)
21,313
growth
TOTAL CROSS-BORDER
FUNDING TO
MICROFINANCE
KfW
Azerbaijan
Serbia
BiH
Bulgaria
Russia
FMO
EIB
IFC
EBRD
22
39
3,397
275
121
73
224
2,060
2,753
39
82
6,068
39
13
18
6,118
1,931
72
2,003
3,948
72
165
4,185
53
11
14
8
6
1,099
57%
22%
6,188
$100-300 mln
$100-300 mln
$100-300 mln
$300-500 mln
$300-500 mln
3%
4%
9%
20%
21%
11%
2%
14%
7%
54%
21%
20%
growth
-7%
23%
growth
-24%
-9%
26%
23%
growth
14%
0%
14%
28%
8%
10%
26%
growth
Eastern Europe &
Central Asia
(ECA)
KfW
AECID
Colombia
Bolivia
Ecuador
Mexico
Peru
MIF IADB
IFC
World Bank
26
18
2,998
30
83
196
90
1,307
1,707
18
431
4,274
18
51
34
4,620
2,014
161
2,175
2,001
161
387
2,549
67
13
17
12
3
743
33%
21%
4,724
4%
3%
$100-300 mln
$100-300 mln
$100-300 mln
$300-500 mln
$300-500 mln
4%
5%
6%
9%
10%
20%
0%
-23%
1%
53%
growth
1%
23%
growth
56%
-1%
5%
21%
growth
27%
56%
28%
20%
-5%
3%
15%
growth
Lan America & the
Caribbean
(LAC)
AECID
12
W.Bank & Gaza
Lebanon
Jordan
Egypt
Morocco
EC
KfW
IFAD
AFD Proparco
5
254
0
63
150
9
306
528
5
128
654
5
13
12
757
67
32
99
386
164
137
687
16
8
10
7
4
29
46%
4%
787
-1%
5%
0%
-7%
<$50mln
<$50mln
<$50mln
$100-300 mln
$300-500 mln
7%
7%
8%
11%
13%
39%
-2%
28%
17%
-19%
growth
36%
growth
-18%
-26%
31%
growth
83%
68%
80%
9%
15%
-30%
growth
Middle East & North
Africa
(MENA)
AsDB
Sri Lanka
Afghanistan
Pakistan
Bangladesh
India
IFAD
DFID
KfW
World Bank
8
1,428
1,053
8
21
161
30
1,363
1,583
1,428
305
2,331
1,428
32
35
2,569
488
153
641
580
490
2,353
3,423
37
14
11
11
7
33
72%
1%
4,064
-7%
8%
> $1 bln
5%
6%
9%
25%
27%
67%
-72%
-57%
-6%
45%
13%
growth
-18%
33%
growth
-24%
17%
-20%
25%
growth
127%
135%
129%
18%
-17%
-10%
growth
$50-100 mln
$100-300 mln
$100-300 mln
$300-500 mln
South Asia
(SA)
IFAD
AfDB
Mali
Mozambique
Uganda
Kenya
Ethiopia
EC
Gates F.
AFD Proparco
41
167
1,055
5
62
687
82
487
1,322
167
774
1,603
167
85
129
2,163
343
291
634
702
478
729
1,909
40
14
14
15
7
441
34%
22%
2,544
3%
$100-300 mln
$100-300 mln
$100-300 mln
$100-300 mln
$100-300 mln
5%
5%
6%
7%
11%
61%
29%
22%
96%
-23%
growth
13%
28%
growth
8%
6%
-1%
26%
growth
43%
96%
63%
51%
-4%
-1%
13%
growth
Sub-Saharan Africa
(SSA)
Total Market (CGAP Esmate): 22 to 25 billion USD
Sample: 21.3 billion USD
40
1,067
0
1
341
3
9
354
40
347
1,075
40
62
128
1,231
262
319
581
763
76
40
880
13
12
10
4
381
0%
38%
1,461
87%
1386%
23%
41%
-7%
23%
growth
0%
74%
growth
-51%
18%
37%
49%
growth
750%
-11%
34%
65%
-38%
-3%
41%
growth
Mul-Region
Methodological Notes: CGAP conducts two regular surveys on funding flows: the CGAP Microfinance Funder Survey and the CGAP MIV Survey. For the first me this year, data from both surveys was consolidated to present a comprehensive picture of cross-border funding for microfinance. The table above is based on data reported by 61 funders and 90 microfinance investment
intermediaries. All data is as of December 2009. CGAP used data provided by microfinance investment intermediaries to es
mate fu nding from individual investors and ins
tu
onal investors. Growth rates are based on a subset of respondents for which data is available for all years covered by the surveys. If not specified otherwise, analysis is based on commiªed amounts. For
ques
ons or further data requests please contact Barbara Gähwiler at bgahwiler@cgap.org.
*Commitments represent the stock of funds set aside for microfinance at a given me, whether or not disbursed. Sample size = 61 funders + CGAP es
mates.
**Net new commitments represent the change in commitments in the survey year. Sample size = 57 funders + CGAP es
mates.
*** DFIs' comm
ments at market infrastructure and policy levels are not fully captured by this survey. Sample size = 57 funders + CGAP es
mates.
1
2
3
4
5
Total number of countries receiving direct funding
1
2
3
4
5
Top 5 countries (and range of direct commitments)
Direct Funding only
Top 5 funders (and % of total commitments)
Commitments by Type of Funder
Public
Mullateral and UN Agencies
Bilateral Agencies
DFIs
Private
Founda
ons and NGOs
Other investors (individual and ins
tu
onal)
Commitments by Level of Financial System
Retail
Market Infrastructure
Policy
Unspecified
Commitments by Purpose
On-lending
Capacity Building
Unspecified
Direct vs. Indirect Funding
Direct (including via governments)
… debt
… equity
… grants
… guarantee
… other instruments
Indirect (ie via funds, holdings)
Unspecified
Total Commied Amount*
Growth 08/09 (%)
Concentraon on top 5 funders
Net New Commitments**
Number of Funders Involved
Mullateral and UN Agencies
Bilateral Agencies
DFIs
Foundaons and NGOs
Microfinance Investment Intermediaries (MIIs) - used as a proxy to
esmate funding from individual and instuonal
All currency figures are in million US Dollars as of 2009-12-31.
Growth rates are for 2008/2009
Region Table
CGAP Microfinance Funder Survey
11
12
No. 70
April 2011
Please share this
Focus Note with your
colleagues or request
extra copies of this
paper or others in
this series.
CGAP welcomes
your comments on
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are available on the
CGAP Web site at
www.cgap.org.
CGAP
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Tel: 202-473-9594
Fax: 202-522-3744
Email:
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© CGAP, 2011
The authors of this Focus Note are Mayada El-Zoghbi, CGAP senior
microfinance specialist, Barbara Gähwiler, CGAP microfinance
analyst, and Kate Lauer, CGAP consultant. The authors thank Jasmina
Glisovic, Alice Nègre, and Xavier Reille for their contributions to this
Focus Note.
The suggested citation for this Focus Note is as follows:
El-Zoghbi, Mayada, Barbara Gähwiler, and Kate Lauer. 2011. “Cross-Border Funding of Microfinance.” Focus Note 70. Washington,
D.C., April.